UltraTech Cement could buy Holcim-Lafarge assets

UltraTech Cement Ltd, India’s biggest cement maker, is considering buying the local assets of Holcim Ltd and Lafarge SA, according to a person with direct knowledge of the matter.

“The ready availability of assets may help the Indian firm gain market share without having to build greenfield factories,” said Rashesh Shah, an analyst at ICICI Securities Ltd in Mumbai. Birla’s plan also underscores optimism among investors that a stable government following this month's elections will spur a revival in the US$1.8trn economy.

“Holcim-Lafarge’s asset shedding is a big opportunity for UltraTech to bolster its market share,” said Shah. “Being the largest player in the sector with a healthy balance sheet, it is a natural buyer of good assets on the block.”

Kumar Mangalam Birla, who controls UltraTech, is waiting to see what will be on sale as the two European companies prepare to dispose of plants, according to the source. Holcim and Lafarge, which agreed to a merger last month, may divest in Brazil, India, China, Canada and the US, Lafarge CEO Bruno Lafont told investors on 7 April.

Mumbai-based UltraTech plans to add 20Mta to its current 58Mta capacity in the next three years, for which a few buyouts will be necessary, the person said. The company is also scouting for assets and sites to build plants in Indonesia, Thailand, Myanmar, Oman, the Philippines and Malaysia. It is already present in the United Arab Emirates, Sri Lanka, Bangladesh and Bahrain.